Yell awaits final refinancing approval

Rhian Nicholson
30.10.09 09:04

Struggling Yellow Pages-owner Yell Group (YELL) is waiting on two lenders to approve its refinancing plans for its �3.8 billion debt mountain.

If they agree to the rescue restructuring this will push the level of acceptances up to the requisite 95% level.

Yell says it has made "significant progress" in the last 24 hours after extending the deadline for acceptances for the third time to 5pm yesterday.

The company, which has been badly hit by the advertising downturn and the rise of online publishing, said agent bank HSBC will confirm the final count of lenders.

It wants to launch a �500 million cash call to cut its debts and an extension of the repayment date on its current loan facilities to 2014 in return for raising the interest rate payable by 1%.

Take a look at the iBall TV episode on Yell Group to see what the City without a suit makes of the firm.

The firm, which racked up its heavy debts following a acquisition spree in Spain and the United States earlier in the decade, is also looking to issue bonds or equity in the coming 18 months to slice a further �300 million off its long-term debt.

Yesterday the FTSE 250 group warned it could end up taking its battle to the courts as a minority of lenders proved reluctant to back its plans.

Around 3% by value of lenders were unable to accept the proposals due to restrictions imposed on them by their funds.

Yell, which was floated by its private equity owners Apax and Hicks Muse in 2004, has been in talks with its lenders over restructuring the debt since the end of June.

Investors were cheering the news on the Interactive Investor Yell Group discussion board, although some remained cautious.

Knellerwoman says: "It is now a complete no-brainer. Out of 300 lenders, 298 are saying Yell has a good future. These are odds that I like."

Cjdrum adds: "The tricky part is knowing when the equity issue (I personally can see a placing rather than a rights issue) will be announced and at what terms."

Yell awaits final refinancing approval

More Articles